Palattao vs. Court of Appeals

An ejectment suit is not abated by a pending action for specific performance or injunction, as the former involves purely de facto possession, and a qualified acceptance of an offer to sell constitutes a counter-offer that fails to perfect a contract of sale.

Petitioner Yolanda Palattao leased a 490-square-meter property to private respondent Marcelo Co for three years, granting the lessee the first option to purchase. During the final year of the lease, Palattao offered to sell only 413.28 square meters of the lot. Co expressed intent to exercise his option but insisted on purchasing the entire 490-square-meter premises, creating a discrepancy in the subject matter of the proposed sale. Palattao subsequently set a deadline for the payment of a 50% downpayment, warning that failure to pay would authorize her to sell the property to others. Co failed to pay the downpayment, did not request an extension, and instead wrote to Palattao to exercise an option to renew the lease. Palattao rejected the renewal and demanded that Co vacate.

• The Lease and Option to Buy: Petitioner leased a house and a 490-square-meter lot to private respondent for three years (January 1, 1991 to December 31, 1993), renewable at the option of the parties. The contract granted the lessee the first option to purchase the leased property.
• Negotiations for Sale: During the last year of the lease, petitioner offered to sell 413.28 square meters of the lot at P7,800.00 per square meter. Private respondent replied that he would exercise his option but insisted on buying the entire 490-square-meter premises, inquiring why only a portion was offered. Petitioner subsequently made a final offer on November 6, 1993, at P7,500.00 per square meter with specific payment terms.
• Qualified Acceptance and Counter-Offer: Private respondent accepted the offer on November 7, 1993, but reiterated his request for clarification on the size of the lot, maintaining that his option covered the entire property. Petitioner acknowledged the acceptance on November 10, 1993, and gave private respondent until November 24, 1993, to pay the 50% downpayment, with the caveat that failure to pay would authorize her to sell the property to others.
• Failure of Condition and Demand to Vacate: Private respondent failed to pay the downpayment or request an extension. On November 29, 1993, he wrote to petitioner manifesting his intention to renew the lease for another three years. Petitioner rejected the renewal, demanded that private respondent vacate the premises, and subsequently filed an ejectment suit when he refused.
• The Specific Performance Suit: Prior to the ejectment filing, private respondent had lodged a specific performance case in the RTC to compel the sale. During the hearings, the parties agreed to maintain the status quo pending negotiations for an amicable settlement. When negotiations failed, petitioner initiated the ejectment case.

• Estoppel: Petitioner argued she was not estopped from filing the ejectment case because the status quo agreement was limited to the period of negotiations for an amicable settlement, not the entire pendency of the specific performance case.
• Abatement of Ejectment: Petitioner contended that an injunctive suit or a specific performance case does not bar the filing of an ejectment proceeding.
• Perfection of Contract: Petitioner maintained that no perfected contract of sale existed because private respondent's acceptance was qualified—he insisted on buying the whole 490 square meters instead of the 413.28 square meters offered—and he subsequently failed to pay the required downpayment.

• Perfected Contract of Sale: Respondent argued that a perfected contract of sale existed between the parties, justifying his continued occupation of the premises.
• Status Quo Agreement: Respondent contended that the filing of the ejectment case violated the agreement to maintain the status quo in the specific performance case.
• Alternative Proposal: Respondent claimed his proposal to renew the lease was merely an alternative to the sale and did not constitute an abandonment of his option to buy.

• Estoppel: Whether the agreement to maintain the status quo in the specific performance case estopped the petitioner from filing an ejectment suit.
• Abatement of Ejectment: Whether a pending action for specific performance and injunction bars the filing of an ejectment case.
• Perfection of Contract: Whether a perfected contract of sale was formed between the parties given the discrepancy in the subject matter and the failure to pay the downpayment.

• Estoppel: No estoppel existed. The status quo agreement applied only to the period of negotiations for an amicable settlement, as evidenced by the transcript of stenographic notes and the trial court's order, and was not intended to be operative for the duration of the specific performance case.
• Abatement of Ejectment: Ejectment suits are not abated by actions for specific performance, injunction, or ownership disputes. Unlawful detainer actions are designed to summarily restore physical or de facto possession without prejudice to the settlement of opposing claims of juridical possession in appropriate proceedings. Suspension is allowed only in rare instances involving strong reasons of equity, such as the imminent demolition of the premises, which was not present here.
• Perfection of Contract: No perfected contract of sale was formed. A qualified acceptance—where the offeree insists on purchasing the entire 490-square-meter property instead of the 413.28 square meters offered—constitutes a counter-offer that annuls the original offer. Furthermore, even assuming agreement on the lot size, there was a mutual withdrawal from the contract when the respondent failed to pay the downpayment by the deadline and instead proposed a lease renewal.

• Independence of Ejectment Suits — Ejectment suits under Rule 70 are summary actions designed to restore physical or de facto possession and are not abated by injunction suits, specific performance cases, accion publiciana, accion reivindicatoria, or actions for quieting of title, annulment of sale, or reformation of instrument filed in the RTC. Suspension is an exception allowed only upon strong reasons of equity, such as when execution of the ejectment judgment would result in the demolition of the premises.
• Perfection of Consensual Contracts — Contracts of sale are perfected upon mere meeting of the minds. Acceptance must be absolute, plain, unequivocal, and unconditional, with no variance from the proposal. A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer, failing to generate consent.

• "To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal. A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer."
• "It is a settled rule that injunction suits and specific performance cases, inter alia, will not preclude the filing of, or abate, an ejectment case. Unlawful detainer and forcible entry suits under Rule 70 are designed to summarily restore physical possession of a piece of land or building to one who has been illegally or forcibly deprived thereof, without prejudice to the settlement of the parties' opposing claims of juridical possession in appropriate proceedings."

• Wilmon Auto Supply Corporation v. Court of Appeals, 208 SCRA 108 (1992) — Followed. Established the rule that an ejectment case based on expiration of lease should not be abated by an action to enforce the right of prior purchase, enumerating various actions that do not suspend ejectment suits.
• Vda. de Legaspi v. Avendaño, 79 SCRA 135 (1977) — Distinguished. Recognized as a rare exception where an ejectment suit was suspended on strong reasons of equity (imminent demolition of premises), a factor absent in the present case.
• ABS-CBN Broadcasting Corporation v. Court of Appeals, 301 SCRA 572 (1999) — Followed. Cited for the principle that acceptance must be absolute and unconditional to perfect a contract; a qualified acceptance constitutes a counter-offer.

• Rule 70, Rules of Court — Governs forcible entry and unlawful detainer suits. Applied to underscore the summary nature of ejectment actions, which aim to restore physical possession de facto without prejudice to claims of ownership in appropriate proceedings.
• Civil Code provisions on Contracts — Applied to determine the perfection of contracts, specifically requiring a meeting of the minds on the object and cause, and mandating that acceptance must be absolute and unconditional to perfect a consensual contract.

Davide, Jr., C.J., Puno, Kapunan, and Austria-Martinez, JJ.